Economy Watch: New NW Florida Airport Spurs CRE Development

In a commercial real estate economy like this, finding spots of growth can be a little tricky, but they're out there.

May 14, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user Ray Devlin

In a commercial real estate economy like this, finding spots of growth can be a little tricky, but they’re out there. Like flowers in a greenhouse, certain specific local conditions are still stimulating CRE growth in certain places–such as Panama City, Florida.

That’s because the region is about to be home to a new airport, the Northwest Florida Beaches International Airport, which is an expansion and relocation of the soon-to-be-closed Panama City-Bay County International Airport. The new facility is the first major airport to open in the United States since September 11, 2001. The old airport was small by most standards, and its location made it impossible to expand. The new airport, with its created-by-the-marketing-department name, has a 10,000-foot runway, 105,000 square feet of terminal space and seven gates.

Airlines that previous didn’t fly into the Panama City area will be when the airport opens on May 23. Perhaps most critically for economic development and real estate in the area, Southwest Airlines will establish connections with Baltimore, Houston-Hobby, Nashville and Orlando. Soon many more people will be coming to the Florida panhandle than ever before, spurring demand for various kinds of real estate.

The St. Joe Co., which owns most of the land around the airport and much else besides in the region, will be its prime beneficial of the airport (in real estate terms), and been working for about two years on VentureCrossings, an industrial park near the airport that will break ground later this year. At first, the the park will include 50,000 square feet of office space, part of which St. Joe itself will occupy.

Other parts of the park will include light industrial space; space for manufacturing, distribution and logistics companies; and some retail. Elsewhere on St. Joe land not far from the airport, residential development is planned to meet anticipated demand–which will probably rebound sooner in this part of the country than most other places.

“VentureCrossings is the largest mixed-use development currently under way in the United States,” Kevin Johnson, vice president of economic development for the St. Joe Co., tells CPE. “At ultimate buildout–and it will be quite a while–we’re looking at 37 million square feet of commercial space and 2,700 residential units.”

Because of the presence of the airport, Johnson said, potential tenants are keenly interested. “There’s strong interest from aerospace companies, logistics and transportation companies, and healthcare firms, among others,” he said. “Southwest has certainly gotten their attention. Now we’re out telling potential tenants that because of the size and scale of our project, we can handle just about any kind of use.”

U.S. Foreclosures Down in April

Not as many Americans lost their homes in April as in March, according to foreclosure specialist RealtyTrac on Thursday. A default notice, scheduled auction or bank repossession was reported for more than 333,800 residential properties nationwide during last month, down 9 percent from March. It should be noted, however, that March 2010 was a record.

The April 2010 numbers represented a 2 percent decrease compared with April 2009, the first year-over-year drop in the total since RealtyTrac began crunching foreclosure data. “Foreclosure activity has begun to plateau—but at a very high level that will not drop off in the near future,” James J. Saccacio, CEO of RealtyTrac, said in a statement.

As ever, Nevada ranked first in foreclosures, with 1 out of every 69 units receiving a filing last month. At least that figure is even with the April 2009 totals. Other states, unfortunately, have seen their foreclosures go up compared with a year ago, such as Michigan (up 77 percent), Utah (up 44 percent), and Georgia (up 21 percent).

Big Day for Senate Finance Overhaul Amendments

Sen. Al Franken’s (D.-Minn.) amendment to fundamentally change the way asset-backed securities are rated passed the U.S. Senate on Thursday 64 to 35, with 10 Republicans on board. If the amendment makes its way into law (hardly a sure thing), it would form a new board that would assign a rating agency to every new ABS bond issue–unlike the current system, in which bond issuers can shop for the most favorable ratings agency. It isn’t clear yet, however, exactly how such a board would function or who would be on it.

Also on Thursday, Sen. Dick Durbin’s (D-Ill.) amendment to allow stores to give customers discounts for using cash, or debit and credit cards that cost the retailer less in so-called swipe fees, passed the Senate. Retailers have long wanted such leverage against banks; banks have long fought against the idea. It passed 64 to 33, with 17 Republicans voting for it.

Wall Street experienced a down day on Thursday, with the Dow Jones Industrial Average losing 113.96 points, or 1.05 percent. The S&P 500 dropped 1.22 percent and the Nasdaq declined 1.26 percent.